Informal Employment in Moldova: Causes, Consequences and Ways to Reduce it

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Publishing date: Thursday, 27 September 2012
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High incidence of informal employment has characterized the Moldovan labour market  throughout the transition period. But fighting informal employment entered the agenda of the authorities only recently, in 2011, when losses for budgetary revenues generated by this phenomenon were calculated. Informal employment, and especially "undeclared work" and "envelope wages", have become widely discussed topics in Moldova since summer 2011, when the Action Plan to minimize the practice of paying wages in "envelope" and "undeclared work" was approved. This study aims to examine the real causes of this phenomenon, and to determine the factors affecting supply and demand for informal labour. The study offers some calculations on losses for the state budget in 2010 and 2011 from undeclared work and wages and includes policy recommendations to reduce the informal employment involving tax evasion.

Full version available only in Romanian.

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